QUESTAR'S EARNINGS RISE 16% IN FIRST QUARTER

SALT LAKE CITY — An 82% increase in net income from oil and gas exploration and production and other nonregulated activities contributed to an overall 16% rise in earnings for Questar Corp. (NYSE:STR) during the first quarter of 2000.

The diversified natural gas company reported income of $50,230,000, or $.62 per diluted share, for the three months ended March 31, 2000. In the year-earlier quarter, Questar earned $43,364,000, or $.52 per diluted share.

Questar's nonregulated Market Resources segment — which includes oil and gas exploration and production, and gas development, marketing and gathering — earned $15 million during the first quarter of 2000 compared with $8.3 million in the year-earlier period. Natural gas production increased 13% while the average selling price of gas rose by 17% and oil and natural gas liquids by 109%.

Regulated Services — comprising retail gas distribution and interstate transmission and storage — earned $27.9 million during the first quarter of 2000 versus $27.2 million a year earlier.

Questar's net income included gains from telecommunication-stock sales of $5.5 million, or $.07 per share, in the current-year quarter and $5.7 million, or $.07 per share, a year earlier. Excluding the gains, net income was $44,695,000, or $.55 per share, in the first quarter of 2000 compared with $37,649,000, or $.45 per share, for the prior-year period.

There were 80.8 million average shares outstanding in the 2000 quarter versus 82.8 million a year earlier, reflecting the corporation's ongoing stock-repurchase program.

R.D. Cash, Questar chairman, president and chief executive officer, said the corporation's "strong growth in gas production over the last five years set the stage for significant earnings growth with the vastly improved commodity prices. Increasing gas production and reserves is one of our primary value drivers, and we are optimistic about our continuing progress."

Market Resources produced 17 billion cubic feet (Bcf) of natural gas during first-quarter 2000 and received an average price of $2.17 per thousand cubic feet (Mcf). During the 1999 period, production totaled 15 Bcf at an average price of $1.86 per Mcf. Production benefited from a successful development drilling program and acquisition of Canadian producing properties in the first quarter of 2000. Canadian gas production grew 94% to 1.6 Bcf while U.S. production increased 8% to 15.4 Bcf.

The average selling price of oil rose 104% to $23.54 per barrel while natural gas-liquids prices increased from $4.77 per barrel to $14.25. Combined oil and natural gas-liquids production declined 9% from year-earlier levels, primarily from the sale of nonstrategic properties in fourth-quarter 1999. The amortization rate was $.80 per thousand cubic feet equivalent during the first quarter, $.03 lower than a year ago.

Net income for Wexpro Co., a subsidiary that develops gas reserves on behalf of Questar's distribution utility, increased $700,000 to $5.8 million. Wexpro expanded its investment in development-drilling projects in response to higher regional demand. Gas-gathering and energy-trading earnings were $900,000 versus $800,000 in the year-ago quarter.

In the Regulated Services area, Questar Gas — a retail gas-distribution utility — earned $20.7 million during the current-year quarter, up 2% over the 1999 period. The earnings benefited from $7 million in annualized interim rate relief granted by the Utah Public Service Commission, effective Jan. 1, 2000, and continuing strong customer growth. The interim relief is subject to refund pending a final order by the commission on the company's $22 million general-rate-increase request. Total deliveries improved 5% to 51.1 million decatherms (dth), while the customer base expanded at an annual 3.3% rate to 689,000.

Questar Pipeline — an interstate gas-transportation and storage subsidiary — reported net income of $7.1 million in the 2000 period, a $200,000 year-to-year increase. The pipeline's earnings in the first quarter of 2000 included $1.3 million before taxes from capitalizing financing costs associated with pipeline construction, down from $2.4 million in the prior-year quarter. Transportation volumes in the 2000 period were 66.7 million dth, 3% above the year-earlier period.

Other Operations reported net income of $7.3 million in the 2000 quarter compared with $7.9 million a year ago. Sales of company-owned stock in Nextel and Nextlink corporations contributed $5.5 million of net income in this-year's quarter versus $5.7 million in the 1999 period. Questar MetroNet Services, which provides electronic-commerce products and services, recorded quarterly earnings of $200,000 on revenues of $4.7 million.

Questar is a $2.2 billion integrated energy resources and services company headquartered in Salt Lake City. Through subsidiaries, it engages in energy development and production; gas gathering and processing; wholesale gas, electricity and liquids trading; retail energy services; interstate gas transmission and storage; retail gas distribution; and information systems and technologies.

This news release contains some forward-looking statements about the future operations and expectations of Questar Corp. and its subsidiaries. These statements were made in good faith, and the corporation believes they are reasonable representations of the company's expected performance at this time. Actual results may vary from stated expectations due to a variety of factors.